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2. A price-taking profit-maximizing firm produces widgets using capital, K, and labor, L, ac- cording to a production function, f(L, K). The market price is
2. A price-taking profit-maximizing firm produces widgets using capital, K, and labor, L, ac- cording to a production function, f(L, K). The market price is p. In the short run, capital is fixed at the level K > 0, however, the firm must still pay the rental cost, r, for each unit of capital. Each unit of labor is employed at the cost w > 0. Assume that 21 t 92 1(L,K)
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